Greece Impact on Property Limited But Investors Are Concerned About Spain

So far, commercial real-estate analysts looking at Europe’s booming market are not too concerned that Greece’s turmoil will spread further afield.

But if there is one country where investors could turn cautious, it’s Spain, property analysts and brokers said.

For one, national elections due before the end of this year will feature leftist parties fueled by similar public disenfranchisement that launched Greece’s current government into power.

“A lot of international investors might reconsider their positions in Spain in light of the elections,” said Christopher Bell, managing director at real-estate broker Knight Frank.

Secondly, the Spanish property market has roared ahead in the past few years, with increasing confidence stemming from signs of economic recovery.

“It’s inevitable there will be some reassessment (in Spain),” said Andrew Burrell, head of forecasting at broker JLL. The market is beginning to recognize that “a lot of the strongest returns have been taken, and a lot of the best deals have been done,” Mr. Burrell said.

But while wariness over an election outcome this autumn and the current boom could cause the pace of investment to slow down in Spain, it won’t necessarily reverse it, said Neil Blake, head of European research at broker CBRE.

Analysts noted that signs of economic recovery in Spain make the country very different – and far stronger in investors’ minds – than Greece, which has been mired in recession for six years.

Spain’s strengthening economy will make it harder for left-leaning parties to gain as much traction as they did in Greece ahead of its election earlier this year, said David Hutchings, head of investment strategy at broker Cushman & Wakefield.